Meritocracy

Many equate “democracy” with “meritocracy.” But history teaches us that the longer a social system remains intact, as individuals garner “success” – power and wealth – those who climb to the top of that socio-political ladder almost uniformly use that accumulation of success to hold their position and make sure their children inherit their status as well. Economic aspects of social structures divide values in terms of labor, capital and land. Landowners were the mega-wealthy when our nation was founded, but over time and with technological improvement, capital supplanted land use as the big American value-creator.

The use of “corporations” accelerated the ability to turn capital ownership, sometimes combined with land ownership, into fungible and tradable currency. Likewise, that ability to accumulate value within a larger corporate structure also enhanced the further capacity to borrow and raise additional funds not available to most of us.

So, when you examine how power and wealth are used, particularly in the American system of governance, those who own capital and productive real estate – including those who service those sectors by sharing in the values generated (e.g., bankers, lawyers, financial advisors, etc.) – have the ability to buy more land and capital equipment, while the vast bulk of the population provide labor. But technology is imbuing the capital sector – though artificial intelligence and implementing automation – with an ability to eliminate labor and absorb the values that labor once created into their ownership and control of capital equipment.

The net impact of this macro-trend, combined with global outsourcing (less of an issue today because of automation), is a job displacement that serially eliminates so many tasks, from routine and repetitive manufacturing to mathematically-determined analytics and consumer interaction. Looking at this another way, it is a ground-up contraction of the middle class, starting with blue-collar labor and working its way up the skilled labor market. Labor values are replaced by automated equipment values, and income shifts away from wages and salaries to those who own the capital equipment. We call this “income inequality” or “polarization,” but technology is making things worse very fast, and the capital markets are rewarding capital and punishing labor.

China’s Mao Zedong watched as cadres with power used that success to further distance themselves from the masses. He watched senior members of the Communist Party use political stature the same way rich global capitalists used money. Though his methods were unthinking, distorted and particularly cruel, Mao loved shaking up China’s power structure – The Great Leap Forward and the Cultural Revolution, for example – to take that sense of the entitled communist elite down, to level society by elevating those at the bottom to the top. Having untrained incompetent ideologs run a nation is clearly a recipe for disaster, and by the time Deng Xiaoping took over the People’s Republic, his first efforts were directed at restoring competent leadership and a functional bureaucracy. Deng was the father of the success you see in modern China, a system that lifted over a billion people out of desperate poverty in about 30 years.

Yet there is something alluring about thinking that a social structure, an ideal government, should be fair. People should be equal. Particularly to Americans, most of whom once thought of their country as a land of opportunity. But as the blue-collar segment of Donald Trump’s base will tell you, the notion of upward mobility in America has degenerated to historical myth, such that most Americans believe that future generations will not live up to the same economic quality of life as past generations. Those blue-collar members of his base have long-since been displaced, clearly out of the middle class, but many kicked out of their traditional livelihoods. Under the current socio-economic structure, despite Trump’s promises to the contrary, the middle class will continue to contract.

But as we all know, America has moved increasingly away from being a true democracy. Our system of government is skewed to rural voters. E.g., California and Wyoming each have two US Senators. Income inequality has never been this polarized in the entire history of the United States. Just watching rich folks bribe their kids into college tells you how bad the “entitled” in this country believe they can act without consequences. You can read my March 13^th blog, The Real Entitlements: Privilege, for more of the grimy details.

But Americans still rail at unfairness and mistakenly believe that people can earn their way to success. Clifton Mark, writing for the March 13^th FastCompany.com, explains: “Meritocracy has become a leading social ideal. Politicians across the ideological spectrum continually return to the theme that the rewards of life–money, power, jobs, university admission–should be distributed according to skill and effort. The most common metaphor is the ‘even playing field’ upon which players can rise to the position that fits their merit. Conceptually and morally, meritocracy is presented as the opposite of systems such as hereditary aristocracy, in which one’s social position is determined by the lottery of birth. Under meritocracy, wealth and advantage are merit’s rightful compensation, not the fortuitous windfall of external events.

“Most people don’t just think the world should be run meritocratically, they think it is meritocratic. In the U.K., 84% of respondents to the 2009 British Social Attitudes survey stated that hard work is either ‘essential’ or ‘very important’ when it comes to getting ahead, and in 2016 the Brookings Institute found that 69% of Americans believe that people are rewarded for intelligence and skill. Respondents in both countries believe that external factors, such as luck and coming from a wealthy family, are much less important. While these ideas are most pronounced in these two countries, they are popular across the globe.

“Although widely held, the belief that merit rather than luck determines success or failure in the world is demonstrably false. This is not least because merit itself is, in large part, the result of luck. Talent and the capacity for determined effort, sometimes called ‘grit,’ depend a great deal on one’s genetic endowments and upbringing…This is to say nothing of the fortuitous circumstances that figure into every success story.” The American playing field has never been more tilted toward the “haves.” There is a seething anger in America, growing by the day. We now feel that the notion of a meritocracy is dying if not dead in the country.

              I’m Peter Dekom, and Americans are mad as hell but are they ready to make the seismic shifts necessary to restore fairness to the system.